New FSS chief stresses watchdog's supervisory role, independence

Yoon Suk-heun, the newly inaugurated chief of the Financial Supervisory Service, on Tuesday underlined the need for the watchdog to remain independent from administrative pressure and market interests.

“As suggested in the name ‘Financial Supervisory Service,' our role is to supervise financial (businesses)," said the 70-year-old reformist scholar upon taking office as the FSS governor, viewing independence as a key virtue in accomplishing such function.

“Financial supervision should not settle as a means of conducting administrative affairs... it should serve as a risk management function by actively keeping checks and balances between the financial market and industry.”

Yoon, a visiting professor of business administration at Seoul National University and former economic adviser for President Moon Jae-in during the 2012 presidential election, was appointed to his post on Friday.

He became the third governor to take office in a year as his two predecessors -- Choe Heung-sik and Kim Ki-sik -- consecutively stepped down amid ethical lapses.

“There have been cases in which external interests have deterred the FSS from performing its fundamental role as risk administrator,” he said.

“While (the FSS) failed to voice out its warning, the household debt issue has come to pose a threat upon the nation’s economy.”

The new chief’s emphasis on independence, in combination with his past remarks, raised speculations that he may stand at odds with the top regulator Financial Services Commission.

During his past years in academia, Yoon had suggested that the FSC be split and integrated with other organizations for efficiency’s sake -- its policymaking function consolidated with the Ministry of Strategy and Finance and its supervisory function with the FSS.

“I shall first ponder on how to carry out financial supervision in a neutral and independent way within the given frame,” Yoon told reporters after the inauguration ceremony, refraining from further comments.

Yoon’s inauguration came amid key ongoing disputes, including the recent dividend error scandal at Samsung Securities and the FSS’ tension with Samsung BioLogics over the latter‘s alleged accounting fraud.

“(The agendas concerning the Samsung affiliates) will take place as planned,” Yoon said, in answer to related questions.

By Bae Hyun-jung (tellme@heraldcorp.com)